COVID-19 Frontline Healthcare, Emergency Services & Police Hazardous Duty Tax Exclusion

Request:
If you are an eligible member who has served in a COVID-19 Hazardous Duty zone, the US Government and IRS should exclude your income from taxation.

Example of a current practice includes military Publication 3, “The Armed Forces Tax Guide, the authoritative source for all military specific tax matters, covers the Combat Zone Exclusion.” Read below for a summary of how Front line Covid-19 Hospital, Fire/ Emergency services and Police departments should receive Hazardous duty tax relief during this pandemic and its relevance there in.

Requirements:
You must be able to show proof of being currently employed under hospital staff, Fire or Police departments in one of the 50 United States of America.

Entitlement to the compensation must have fully accrued in a month during which the member served in a “designated hazardous duty zone” or was hospitalized as a result of wounds, disease, or injury incurred while serving in a designated “hazardous duty zone.”

Actions:
There is no required action for you to receive the exclusion. Each entitled organization will automatically certify your entitlement by excluding reportable income on your W-2. If you believe you are entitled, and your W-2 reflects your full, unadjusted annual pay and benefits, contact your organizations pay office to issue a corrected W-2.

Provisions:
Excludable Income – You can exclude the following income related to “Hazardous Duty” compensation:
Basic Pay – All for every month you are present in a hazardous duty zone.
New hire or Continuation Bonuses – You can exclude this income if the relevance of work performed or the execution of the contractual agreement for continued service occurred while present in a hazardous duty zone.
School Loan Repayments – You can exclude part of the repayment associated with the months you were present in a COVID-19 hazardous duty zone.

For example, if a year is required to earn the repayment and you serve six of those months in a hazardous duty zone, you can exclude half of the repayment income.

COVID-19 Imminent Danger/Hostile situation or hostile Fire while under COVID-19 duress Pay – You can exclude all of this income.
Leave Benefits – You can exclude income from selling accrued leave earned while in a hazardous duty zone.
Awards and other Financial Incentives – You can exclude associated income for submissions made while in a COVID-19 hazardous duty zone.
Non-Excludable Taxes – Civilian pay earned while in a COVID-19 hazardous duty zone is subject to Social Security and Medicare taxes and will appear on your W-2.
Period Covered – You will receive the exclusion for months you served in a COVID-19 hazardous duty zone, including partial months of service. One or more days served in a COVID-19 hazardous duty zone during any month counts as a full month.

Limits – The following limits are placed on your exclusion:
Hospital Staff Members – You can exclude all civilian pay for each month present in a COVID-19 hazardous duty zone.
Police Officers – You can exclude all civilian pay for each month present in a COVID-19 hazardous duty zone.
Fire department and emergency services – You can exclude all civilian pay for each month present in a COVID-19 hazardous duty zone.

Married Personnel – The following exclusion combinations are authorized:
If both members are serving in a COVID-19 Hazardous Duty Zone – Both may receive the tax exclusion for the months they were present in a COVID-19 hazardous duty zone.
Both are serving under one of the required COVID-19 frontline worker positions and only One Served in a Covid-19 hazardous duty zone – The spouse who served in a hazardous duty zone may receive the tax exclusion for the months they were present in the hazardous duty zone.
One is Frontline Worker and Served in a COVID-19 hazardous duty zone – The spouse who served in a hazardous duty zone may receive the tax exclusion for the months they were present in the hazardous duty zone.
Hospitalization – You can exclude civilian compensation earned during hospitalization (in or out of a hazardous duty zone) due to wounds, disease, or injury incurred in a hazardous duty zone. If a member of any of the above aforementioned positions is hospitalized for a part of a month as a result of wounds, disease, or injury incurred while serving in that zone, the member is entitled to the exclusion for the entire month. Civilian pay received for hospitalization that extends beyond two years from the last month of presence in a combat zone is not excluded.